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Exercise 9-20B Determining transfer prices LO C2 The trailer division of Baxter Bicycles makes bike trailers that attach to b

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Answer #1
Part-1
Computation of Transfer Price per Trailer
Retail Price of Trailer 92
Variable cost 42
Contribution 50
Minimum Selling Price to Assemble division will be Retail Selling Price $92 .  
Hence transfer Price will be   $92
Part-2
Available Capacity = Total Capacity- Sell to Outside Supplier
=28000-10300= 17700
Spare cpacity is not having any use , Hence trailer division will charged from the range of Minumim Variable cost of $42 to Maximum Retail selling Price of $ 92.
Hence, Transfer Price will be atleast   $42 but not more than $92
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Exercise 9-20B Determining transfer prices LO C2 The trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a retail price...
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